Treece: Drilling in dry wells

Readers who frequent this column will recall my long-held dictum that everything cycles. Be the subject investments, economics, politics or otherwise, everything in this world has a tide that ebbs and flows, albeit on different schedules.

Nevertheless, it remains of utmost importance that in any of these areas, when the flow of tides change directions, we must adjust in turn. Doing so is far more profitable – and eventually far easier – than attempting to swim upstream.

Today there exist surprising crowds of people who have made names for themselves acting solely as antagonists, people who have little or nothing to say if they aren’t provided someone or something to rally against. Of these, Glenn Beck stands out as among the most vocal and probably the most recognizable.

And just what has made Glenn Beck famous? Rallying against unsound monetary policy, speaking out against progressive welfare programs, lambasting unaccountable government czars and, most noticeably, revealing in minute detail the background of a president unqualified for election and – in all likelihood – presently serving his last weeks with any real authority.

Do any of these arguments add value in any way? Do they put forth any reasonable alternative or call for real change? More importantly, do any of them matter if Obama loses re-election and the U.S. federal government tightens its fiscal purse strings?

A recent quote said of this election that “if Barack Obama were running unopposed, he’d have nothing to run on.” In other words, with a president devoid of any meaningful progress or accomplishment after three years in office, any re-election campaign waged by Obama is built solely on bashing Republican candidate Mitt Romney.

Quite often we see the same thing in business. Instances abound where businessmen, spokesmen or pundits survive only because they have someone to struggle against. Theirs is not a constructive struggle; they are simply saying what people want to hear, following the path of least resistance.

A quick story: Around the time George W. Bush was coming into the White House, a caller into Rush Limbaugh’s radio show asked the conservative host what he was going to do now that he wouldn’t have Bill Clinton to speak out against. Rush responded that there would always be issues and events to discuss, and as time went on his subjects changed from those he had discussed during the Clinton years.

The point here is that the United States is presently undergoing a major shift, just as it was around the new millennium. In fact, this instance is likely much larger and further-reaching than was seen a decade ago. The U.S. is now in the midst of major shifts in the sphere of politics, finance, manufacturing and production, employment, military, entitlement spending and the list goes on.

The question now is which of those pundits who have spent the past several years building names for themselves can make the necessary shift from being critical to constructive in their commentary.

Far harder is it to avoid the flavor of the week, but instead to change with the times as required – regardless of popularity – when time calls for such a shift. After all, the one-trick pony can be amusing for a time, but when it ceases to serve a purpose it’s the first one sent to the glue factory.

Dock David Treece is a partner with Treece Investment Advisory Corp (www.TreeceInvestments.com) and is licensed with FINRA through Treece Financial Services Corp. He provides expert content to numerous media outlets. The above information is the express opinion of Dock David Treece and should not be construed as investment advice or used without outside verification.

How are local media covering Obama vs. Romney?

I was raised to believe that anyone could be president of the United States. Certainly in my lifetime, the ascendencies of Bill Clinton and George W. Bush seemed to bolster that theory.

But with the news that President Barack Obama is nearing $1 billion in campaign funds, with challenger Mitt Romney not far behind, I wonder how true that once-bedrock American belief is. Would either of my two sons ever be in a position to access $1 billion? By the time they will be old enough to run, 30 years from now, $1 billion will seem like a quaint little figure.

Would I ever want either of my sons to be president? To experience the rancor, the lies and the open hatred many of our politicians endure?

Would I want to open a newspaper every day and see attacks, lies and attempts to destroy their characters and neutralize any chance they had at effectiveness?

As the election nears, media bias is an ongoing and legitimate concern. As a working journalist, I pay close attention to how local media cover politics. The inexorable acrimony that divides so many Americans has become an accepted element of the discussion; that is clearly seen in the rise of such media outlets as FOX News and MSNBC. More people seem to gravitate to news sources that present the side they believe in, thus depriving themselves of opposing viewpoints and messages.

How does this division and side-taking translate to local media? To investigate, Toledo Free Press commissioned researcher Mary McCartney to study the LexisNexis database and local media websites (The Blade, Toledo Free Press, 13abc, WTOL/FOX and WNWO NBC) to determine whether our hometown media have taken sides in Obama vs. Romney.

Our research studied the period from June 1, 2012 — the week Romney sewed up the GOP nomination with a Texas primary win — through Oct. 3, 2012, just after the first presidential debate. The focus was on which candidate dominated the reporting of each published or broadcast story — which candidate was discussed in more depth, with more words — than his opponent. Each story was determined to fall into one of three categories: Balanced, Obama or Romney. We focused on campaign-specific stories, discounting news coverage of Obama’s presidency if the story did not invoke the campaign. We included opinion columns and analysis pieces alongside news stories, under the belief that total presentation of each candidate was important.

We did not attempt to characterize the tenor of the coverage; judging slant, positive or negative, takes the conversation down a subjective road, far from any empirical analysis. Our study guides you through each media outlet’s volume of coverage. It is up to you to determine if that coverage is fair to your chosen candidate.

Television stations

The broadcast media were firmly entrenched in balanced reporting. All three stations relied on Associated Press reports for website pieces of any depth (as defined by word count); local reporting was limited to local candidate visits.

WNWO NBC presented 34 Balanced stories, 34 Obama stories and 34 Romney stories, a perfect balance for a total of 102 stories. A check of the Federal Elections Commission (FEC) database shows WNWO President/CEO Chris Topf has donated to the National Associaiton of Broadcasters Political Action Committee (PAC), but not to any specific candidate.

WTOL/FOX Toledo included 11 Balanced stories, 17 Obama stories and 24 Romney stories, leaning GOP in its total of 52 stories. An FEC check shows WTOL General Manager Bob Chirdon has donated to the Liberty Corporation Federal PAC, but not to any specific candidate.

WTVG 13abc offered 8 Balanced stories, 11 Obama stories and 8 Romney stories, leaning slightly Democratic in its total of 27 stories. FEC records do not show that WTVG General Manager John Christianson has donated to any specific candidate.

Although Toledo Free Press is certainly more conservative-leaning than The Blade, I was surprised to see the results of our study. Toledo Free Press presented 4 Balanced stories, 5 Obama stories and 12 Romney stories for a total of 21 articles. I was surprised because, working with Toledo Free Press Managing Editor Sarah Ottney and News Editor Brigitta Burks, we have striven to cover Obama and Romney appearances equally. Looking at the details, the source of the disparity is clear. Opinion pieces by conservative writers Tim Higgins, Thomas Berry, Gary Rathbun and Dock David Treece tip our content way in Romney’s favor. I do not apologize for any of our writers’ opinions, but it does help to be aware of the specifics in the gap in our opinion content.

Given Blade Publisher and Editor-in-Chief John Block’s open endorsement of Obama (remember the 2008 Page One Blade photo of Block giddily reaching to embrace then-candidate Obama?), his 2008 donation to Obama for America and his attendance as one of very few guest list media people at the March 14, 2012 State Dinner for U.K. Prime Minister David Cameron, combined with his newspaper’s stalwart liberal philosophy, it would not be surprising to see Obama dominate The Blade’s campaign coverage. And the numbers do show a disparity.

During our study, The Blade reported 56 Balanced stories, 86 Obama stories and 62 Romney stories for a total of 204 articles. The total contains some interesting trends by reporters, presumably covering specific beats. Blade reporter Jim Provance has been credited for 8 Balanced stories, 28 Obama stories and 9 Romney stories; reporter Tom Troy has a byline count of 22 Balanced stories, 25 Obama stories and 36 Romney stories. All other Blade writers had numbers relatively evenly divided between the two candidates.

FEC records do not show any candidate donations by John Block during this election cycle. Block Communications Chairman Allan Block has donated to Romney for President Inc. and the National Republican Congressional Committee. He is also a contributor to Republicans Sen. Rob Portman, Rep. Bob Latta and U.S. Senate candidate Josh Mandel, and Democrat Rep. Marcy Kaptur.

WSPD 1370 AM

In tracking WSPD (disclosure: I host a pop culture radio show for WSPD, for no compensation), which features a conservative lineup led by Rush Limbaugh, Glenn Beck, Sean Hannity and local hosts Brian Wilson and Fred LeFebvre, an interesting trend emerges. Obviously, the station mentions Obama and Romney with a frequency too great to count during the course of four months. FEC records do not list any donations from General Manager Andy Stuart. But WSPD is the only local news source that consistently covers Libertarian Party candidate Gary Johnson. Johnson has been a guest on the station’s local shows and his platform has been regularly discussed in-depth on its airwaves.

To contrast, Toledo Free Press has mentioned Johnson once during the study period. Another review of The Blade for the four-plus months examined showed only three mentions of the Libertarian candidate. Two of those mentions were in passing; one article reported on the visit to Toledo by his vice presidential candidate, Jim Gray, and the main theme of the story was the candidate’s position on same-sex marriage. A study of local television websites shows a number of Associated Press articles.

Summation

Across all media reporting in Toledo, it appears the press tends to slightly lean in favor of the president, with an attempt at balanced reporting across all the organizations. There were 406 stories total: 113 Balanced, 153 Obama and 140 Romney. So while national media may clearly be divided by bias, at least locally, in this study, we can be pleased to have a relatively balanced media.

Unless you’re a Gary Johnson fan.

Michael S. Miller is editor in chief of Toledo Free Press and Toledo Free Press Star. Email him at mmiller@toledofreepress.com.

The liberal establishment

The 4th of July is to freedom what Christmas Day is to faith; a day set aside to recognize and appreciate something we should recognize and appreciate every day.

I am a patriot, and I refuse to let any ideological shadings dissuade me from that identity. I do not equate love of country with any political alliance; patriotism should transcend conservatism, liberalism and all points in between. That is not an espousal of blind faith. It is a commitment to the values of liberty and opportunity, which provide freedom of choice and freedom of voice.

As the editor of a newspaper that regularly receives invectives from left and right adherents (I was once confronted by a University of Toledo library official who described Toledo Free Press as a “right-wing rag,” just minutes before a UT communication professor told me he was disappointed that one of his former students was running a “liberal union mouthpiece paper”), I am sensitive to political perceptions and strive to offer a balanced opinion section. Any publication that publishes Don Burnard and Stacy Jurich on one side and Thomas Berry and Dock David Treece on the other should be able to claim it is offering the podium to a wide range of ideologies.

In an ongoing attempt to understand the evolution of our country’s political divide, I have been reading M. Stanton Evans’ book, “The Liberal Establishment,” which attempts to offer a “true idea of the direction in which our present rulers are taking the once-free society of the United States.”

In his introduction, Evans defines liberalism as “a belief in increased centralization of power in the federal government and in economic ‘planning’ aimed at the creation of a welfare state”; as a foreign affairs approach that problems can best be settled by reasoning with the agents of global conspiracy” and as a “moral relativism” in which the “highest virtue is ‘tolerance’ of anything and everything … there are no fixed standards of right and wrong.”

Evans describes conservatism as a “resistance movement” that struggles to overcome media and social bias: “It was assumed that Liberal ideas were the only ideas, and that suggestions to the contrary were beneath the trouble of refutation, were even, in some versions of the Liberal argument, a form of avarice or dementia.”

Evans outlines five elements of the “Liberal Establishment”: academics and colleges; “upper-brow magazines” such as The New Yorker; the book publishing industry; a “sizable segment of the clergy”; and the motion picture and television industry.

He is particularly critical of the president, writing, “He advances Liberal Establishment programs with agility and zeal; he is acclaimed and glorified by Liberal Establishment spokesmen.” He further describes the president as “a product of American politics at its most technical and antiseptic level, equipped with first-rate antennae for divining issues, assuaging interests and counting votes.”

Evans writes about his concerns that the country is drifting toward socialism and in part blames adherence to the economic theories of John Maynard Keynes.

“In its leading premise that government should control the economic activities of its citizens, Keynesian economics incorporates the central objective of the socialists,” Evans writes. “The avowed purpose of Keynesian fiscal and monetary manipulations is to transfer resources away from those who lend money to those who borrow it and earn it as wages … the goal is to ‘redistribute the wealth’ through the intricate workings of money and credit.”

Evans maintains that “federal aid” is a means to control Americans and make more of the country’s citizens and industries reliant upon the government. Not surprisingly, Evans is worried about the trillions of dollars in debt the country owes and the fact that the government is imposing a “per-family debt” on Americans. He maintains that constant spending causes deficits and inflation, as “the government pumps new money into the economy without a corresponding increase in productivity.” He discusses the dangers for Americans with devalued or disappearing pensions, which ties into a threat to such government aid programs as Social Security and Medicare. Social Security, he writes, is “On the edge of insolvency. There is no money in the ‘fund’; all Social Security revenues go into the general fund of the United States and are spent just like other tax money. Clearly, there is trouble ahead for Social Security.”

Evans saves some of his sharpest criticism for the news media and “managed news.” He accuses the president of employing a “carrot and stick” approach to controlling media. The carrot consists of exclusive scoops, special access and positive recognition. The stick is a denial of access.

It may not be remarkable that Evans’ thoughts are echoed daily on nearly every conservative talk radio program. What is notable is that every word of his “Liberal Establishment” philosophy was published in 1965.

I wanted to conclude that nearly 50 years after Evans wrote his book, the message hasn’t changed one iota; it’s the decline into anger and contempt that separated his era of rhetoric from ours. But then Evans concludes with a strikingly extreme statement: “Liberalism does not resemble socialism so much as it does that ‘revolution without a doctrine, ‘Nazism, and its Mediterranean in-law obsessed with the majesty of power for power’s sake … an excellent case can be made for the position that Liberalism is a genteel American version, not of socialism, but of fascism.”

That brings Evans’ work in line with our modern vitriol, making him less a prophet and more a progenitor of the Glenn Becks, Sean Hannitys and Rush Limbaughs of our time.

Michael S. Miller is editor in chief of Toledo Free Press and Toledo Free Press Star. Email him at mmiller@toledofreepress.com.

Treece: Glenn Beck-onomics and (inflated) rusty gold

Recently, I read Ayn Rand’s novel “Atlas Shrugged,” which got me thinking about the source of value in currency, among other things. The other day I came across an interesting article from Steve Saville (“Economists don’t understand money”), which got me thinking further about this issue.

Money, in modern society, is globally accepted as a medium of exchange. The fact that it is so commonly accepted in commerce breeds within its users a desire to possess ever-increasing quantities.

However, few people remember that this medium of exchange, in and of itself, has absolutely no intrinsic value. Its value in exchange is based upon the fact that people want it and is determined by its users.

Currency the world over has absolutely no practical value in society. It doesn’t satisfy a single basic human need, meaning that one can’t eat it, drink it, sleep on it or use it for shelter. Even in our complex economy, it has no real functional use in manufacturing or production.

The single, solitary use for money is as a store of wealth, which can be used whenever the owner wishes to exchange it for something he considers more valuable, namely a good or service.

How funny it is then that this precise argument, so commonly employed by fear mongers, inflation hawks and political pundits like Glenn Beck, can also be applied to the object of their affection: Gold.

For decades, conspiracy theorists and doomsday subscribers have been peddling gold as an economic panacea. They continually point to poor monetary policy and economic depravity as reasons to store accumulated wealth in “more tangible assets.”

Odd indeed that their choice of assets for storing wealth is among the world’s oldest currencies, and also one of the first to ever suffer from their most disparaged ailment: debasement.

For evidence of fraud in precious metals, look no further than the recent story of rust appearing on .999 gold coins issued by the Central Russian Bank, according to reports from the International Reserve Payment System (presented on ZeroHedge.com). (For those readers who aren’t metallurgists, gold does not rust. Hence, rust appearing on gold coins issued by a central bank indicates obvious fraud, as the coins clearly are not minted of gold.)

For those still unconvinced of the perils of owning or trading in gold bullion — the oldest useless currency in the world — consider the recent ABC News article “Gold Coin Sellers Angered by New Tax Law” by Rich Blake. According to the article, the trading of gold coins will soon come under increased government scrutiny thanks to a little-known provision in Obama’s new health care bill.

Thanks to Obamacare, at the start of 2012, Americans will be required to submit to the IRS 1099s for all purchases in excess of $600, including both goods and services. This means that there will be (or should be) a Form 1099 produced and submitted to the federal government every time a single ounce of gold trades hands after Jan. 1, 2012, (assuming gold stays more than $600/oz).

Gold is undoubtedly a good investment solution for some investors and special situations.

However, given the metal’s limited functionality or practicality in modern society, its current price seems to be likely inflated.

A good number of investors would be wise to ignore the hype surrounding gold and spend some time researching the dynamics of its specialized market to better understand the risks involved.

Dock David Treece is a discretionary money manager with Treece Investment Advisory Corp. (www.TreeceInvestments.com) and a stockbroker licensed with FINRA. He works for Treece Financial Services Corp and also serves as editor of the financial news site Green Faucet (www.GreenFaucet.com). The above information is the express opinion of Dock David Treece and should not be construed as investment advice or used without outside verification.

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